Life insurance to cover school fees
[social_share]One of the most common uses of life insurance these days is to use it as a method to cover school fees. School fees can be a bit of a risk. They are essentially reliant on one parent working throughout the period when the children are going through education.
Although a period of unemployment can be covered either by savings or borrowing, death can not be covered in this way. As the other partner has often taken a much less well paid job in order to be around to look after the children then the school fees are often likely to go unpaid.
This will mean that as well as many other aspects of the upheaval that losing a parent and a partner then the children may also lose the stability of a good education. Life insurance to cover school fees has become very popular as a result.
Life insurance can also be used to help a child through university or college. It is often the case that a student feels that they need to give up university if a parent dies in order to stop being a burden upon the remaining family members. If the student knows that as well as a house that there is also some money that is earmarked for their education then they are far more likely to keep in education and their life chances will improve.
Term insurance is the best vehicle to be used for this purpose. It is much cheaper than other types of life insurance. It is often a good idea to take out some disability insurance when taking out the life insurance, so that the children can keep in education if the main wage earner is no longer able to work at the same type of job as they were before.
One of the issues that face people when they take out life insurance in order to cover school fees is that the school fees change depending on how many children are in education and what stage of education they are at. This means that life insurance should be reviewed regularly, usually once every two or three years.
Another thing to consider while the life insurance is being reviewed is the element of inflation of school fees. School fees tend to rise at a faster rate than other prices. This means that future inflation should be built in.
